Studies on DNA replication of plasmid Co1E1 have been continued. Transcripts (RNA II) that start 555 nucleotides upstream of the replication origin by RNA polymerase form a hybrid with the template DNA. The hybridized transcript is cleaved by ribonuclease H at the origin and used as the primer for leading strand synthesis by DNA polymerase I. Co1E1 DNA can replicate also in the absence of the RNase H and DNA polymerase I. RNA II hybridized with the template DNA displaces the nontranscribed strand. This allows synthesis of the lagging strand on the displaced single-strand. Because this mechanism involves formation of hybrid between RNA II and the template DNA, it is subjected to the negative regulation by RNA I, an antisense RNA, as DNA replication in the presence of RNAase H and DNA polymerase I. The primer transcripts that had extended beyond the normal origin terminated at various positions. A correlation was found between spontaneous termination of RNA II at specific positions and hybrid formation between the transcripts and the template DNA. When we inserted a stretch of dA residues at various positions of the template strand downstream of the origin we found a large fraction of the transcripts hybridized with the template DNA terminated at the stretch while unhybridized transcripts terminated much less efficiently. Studies on termination of these transcripts give important information on p- independent termination: involvement of DNA sequences beyond the actual sites of termination separation of RNA polymerase as the mechanism of termination.